Career switch: It looks like it's time to switch off the computer, buy a straw hat, and start raising chickens. After all, with Atkins-crazed Americans chewing up chicken at alarming rates, there's big money in the poultry business. Today, Pilgrim's Pride
For the second fiscal quarter, the firm posted $0.50 per share, more than double last year's $0.24. Sales hit $1.4 billion, nearly twice the number from last year.
Much of the increase was due to the shrewd purchase of ConAgra's
Back in early February, when avian flu was causing a bit of a panic, slaughtering both birds and stock prices, Fool chicken expert W.D. Crotty -- who shares his homestead with a handful of the winged beasts -- pointed out the folly in dumping shares. It looks like he was right. Tyson Foods
Woulda, shoulda, coulda. Is there any value left in the bird game? That's harder to judge. Pilgrim's Pride today announced restructuring in its turkey business that could result in some impressive savings over the long haul. The firm carries a pretty hefty $643 million in debt, but it has been earning more than enough to cover the interest payments.
Deciding what the stock is worth is the problem. The trailing P/E of around 16 looks fair to rich for a food producer, but Pilgrim's Pride's earnings growth -- along with Tyson's -- has outrun analyst estimates for a while, and investors have jumped on board. There may be bigger earnings ahead, but if chicken prices take a slide, the stocks could go along.
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